In little over a week, voters will head to the polls to elect the next president of the United States and who will make up the 119th Congress.
Much attention has been paid to the presidential contest between the Democratic nominee, current Vice President Kamala Harris, and the Republican contender, former President Donald Trump. Polls have shown the race to be a toss-up. Whether the House and Senate are controlled by one party — or if there is a division of power — is also a critical issue.
The outcome of the Nov. 5 election is likely to have an important impact on a number of key issues that HR experts care about.
"So much depends on the outcome of the presidential election, but the congressional elections also really matter," says James Klein, president of the American Benefits Council, a policy organization that advocates for employers on issues related to benefits. "Whether anything legislative really happens will largely be a function of whether one party controls both houses of Congress and the White House as opposed to a split. The most significant legislation in the last several years has primarily happened when only one party is in control."
Here is a look at some of these key issues.
The threat of new taxes
Tax provisions that were set in the 2017 Tax Cuts and Jobs Act, which was signed into law by Trump, will expire at the end of 2025. If these provisions are extended, that could set off a fight over how to offset the lost revenue, Klein says.
"That makes employer-sponsored health…coverage very vulnerable," Klein says. "We are expecting that to be front and center for Congress and the new president."
Currently, premiums paid for employer-sponsored health insurance are not considered taxable income. But there have been discussions about tapping into this as additional tax revenue.
The Republican Study Committee, which includes most of the party's members in the House, has put forth a proposal that would cap the tax-exemption for employer-based health plans at an unspecified level. It would also extend the same tax treatment to insurance coverage obtained elsewhere. The group has argued that tax-favored treatment of premiums for employer-based health plans "has prevented the organic development of a competitive, transparent and accessible healthcare market."
All of this could mean taxing premiums "could be in play coming from the Republican side of the aisle," Klein adds.
Other potential health insurance changes
In 2019, through an executive order, Trump created individual coverage health reimbursement accounts, or ICHRAs. These allow employers to give workers a stipend to purchase their own health insurance with pre-tax funds. So far, President Joe Biden has not reversed this executive order. The fact that a Democratic administration has not undone this change could be potentially very telling, says Joe Markland, CEO of Nfor1, an HR and benefits company.
"The ICHRA was one of the biggest tax law changes in 75 years," he adds.
However, a worker can only take this step if an employer decides to adopt these accounts.
There is a chance that the next Congress could act to change that. A bill, the Personalized Care Act, has been floated before the Senate that would allow workers to buy their own health insurance plan as a pre-tax expense under a health savings account. Under that legislation, the worker would essentially no longer need their employer's permission to take that step.
Markland believes there could be bipartisan support for expanding access to health insurance through this option because it represents the middle ground between the extremes for each political party.
"It's an important election issue because no one is digging in on either side," Markland says.
"The costs are so high — it's a broken system for everyone," he adds. "Republicans don't want this expense on employers. Democrats, who wanted Obamacare, need a strong individual marketplace. With this, you create more balance, and it makes it more competitive."
Changes to regulations around pay
One non-healthcare area that could be affected by whoever sits in the White House is overtime rules. The Department of Labor issued new regulations that took effect on July 1 that said any employee who is not paid a weekly salary of at least $844 (that's $43,888 annually) was eligible for overtime pay. This was regardless of the type of the work the person was performing. This threshold is set to increase to $1,128 per week (which would be $58,656 per year) starting Jan. 1.
It's likely that a second Trump administration would rollback these changes, says Robert Sheen, founder and CEO of Trusaic, a software company that specializes in regulatory compliance. During Trump's first term, then-Labor Secretary Alexander Acosta withdrew regulations set under the Obama administration that raised the threshold for nonexempt employees.
In another compensation issue, if Harris wins, HR executives could see the minimum wage increased, Sheen notes. The current minimum wage was set in 2009 at $7.25 per hour. Last week, Harris pledged during an interview with NBC to double this to $15 if she wins. (As a note, the minimum wage for California, the state where Harris served as attorney general, is currently $16 an hour.)
"At least $15 an hour, but we'll work with Congress, right? That's something that is going through Congress," Harris said during the interview.
Cabinet members who could matter
Regardless of who wins the White House, HR executives will want to keep an eye on who is selected to lead a few federal agencies. Whoever serves as Labor Secretary could help set the tone for many regulations related to the workplace and taxes. The Treasury Secretary could also affect issues tied to taxes. And, whoever leads the Department of Health and Human Services could influence key decisions on healthcare-related concerns.
